Special Deposit Schemes & Expiry
- Many banks launched high-interest fixed deposit schemes with March 31 deadlines
- Despite the expiry, most banks may not withdraw them immediately
- Some may extend these schemes with lower rates
Key Factors Affecting Interest Rate Decisions
- Banks are assessing liquidity conditions and RBI’s monetary policy before making changes
- Wholesale market rates have moderated, but retail rates remain unchanged due to year-end demand
- RBI’s expected rate cuts and government spending boost may lead to deposit rate reductions
Special Deposit Schemes from Major Banks
- SBI Amrit Vrishti:
- 7.25% for 444 days
- 7.75% for senior citizens
- SBI 400-day FD: 7.10%
- HDFC Bank:
- 7.35% for 35 months
- 7.85% for senior citizens
Expected Changes in Deposit & Lending Rates
- Credit demand remains high in March, keeping FD rates steady
- Deposit rates expected to fall in April-June 2025 as liquidity improves
- RBI dividend in May may further ease liquidity, accelerating deposit rate cuts
- Lending rates may decline first, pushing banks to lower deposit rates to maintain margins
Deposit vs. Credit Growth Trends
- Deposit growth (10.2% YoY, ₹225.1 lakh crore) lags behind credit growth (11.1% YoY)
- Banks have been offering higher FD rates to strengthen deposit bases
- High credit-to-deposit ratios may prompt banks to control credit expansion
Outlook
- Rate cuts likely after April, with sharper declines following RBI’s monetary easing measures
- Banks will adjust deposit rates gradually to balance liquidity and lending profitability
